Behavioral Finance and Real Estate

URL study guide

https://studiegids.vu.nl/en/courses/2024-2025/E_MFRE_BFRE

Course Objective

After successfully completing this course you:are able to write a research proposal in the area of behavioral finance and real estate (Academic and Research Skills);understand how people are subject to distortions or biases in their beliefs and have preferences that are not understood in a normatively acceptable framework (Bridging theory and practice
- knowledge);understand how behavioral biases affect the decisions of participants in real estate markets (Bridging theory and practice
- knowledge);understand how the bounded rationality of market participants can explain the dynamics of real estate markets (Bridging theory and practice
- knowledge).

Course Content

This course provides a behavioral perspective on real estate decision making and markets. In particular, students learn how behavioral biases affect the decisions of participants in real estate markets, and how the bounded rationality of market participants can explain real estate market dynamics. The course starts with a general introduction into the psychology of decision making. Next, it turns to the topics of property valuation, negotiation, and mortgage choice. The final part considers the efficiency and dynamics of real estate markets, with a special focus on bubbles and crashes.

Teaching Methods

Lectures

Method of Assessment

Written exam and assignment

Literature

Bazerman & Moore, Judgment in Managerial Decision Making, Wiley, most recent edition.Selected articles (to be announced).

Target Audience

This course is part of the Minor Real Estate Economics and Finance, and also included in the program of the Minor Risk Management for Financial Institutions.